It’s time to take a look back at what happened to the NYC real estate market during 2020 – one of the most turbulent years in recent memory. The year started off with some predictions, but COVID-19 completely blew them out of the water. So let’s see how things panned out.
A Decent Start
The sales market in Manhattan was already on a downward trend at the end of 2019.
Why? The slowdown that had originally begun in the luxury segment starting around 2018 had filtered its way down through other segments.
But the Manhattan market started to show some signs of improvement in early 2020. This was especially the case below the $2 million mark as more entry level buyers took advantage of lower prices.
Meanwhile, in Brooklyn, although things weren’t quite as lightning hot as in past years, the borough was poised to have yet another strong year.
Contract signings were down significantly year over year at the start of 2020. But steeply declining inventory and steady prices were on track to set up solid buyer interest and competition for the spring.
The Pandemic Hits
Once COVID-19 hit the city, things cratered.
Inventory plunged to lows in 2020 that the NYC real estate market hadn’t seen in years. And buyers hopped back on the sidelines or left the market altogether.
This combination of factors created a market that was effectively “frozen.” Seller’s didn’t really want to sell, and buyers didn’t really want to buy.
But even buyers intrepid enough to continue their search still encountered challenges. Historically low inventory meant they couldn’t even see the remaining inventory in person. They had to either rely on virtual tours or purchase sight unseen. And financing became more challenging for many buyers.
Shutdown Ends, Market Thaws & Prices Drop
Once Phase 2 began on June 22nd (which enabled in person showings to resume), contracts signed started a slow and steady recovery.
Prices were hit hard, not surprisingly. But the hit was uneven. The luxury segment took the hardest hit in overall sales, while lower priced options (below $1 million) showed greater stability. For a full rundown of stats for each quarter, check out my Market Reports section.
Signs of Life
After a quiet August, real signs of stabilization and improvement began to emerge starting in September, as contracts signed finally started to recover to pre-pandemic levels. And in October and November, contract signings began to exceed even year over year numbers.
We’re still awaiting finalized data regarding sales in the month of December 2020. But all signs point to the trends from October and November continuing.
We still won’t have a solid idea as to whether or not the “bottom” has happened, since prices are a lagging indicator. But we should get a much better sense after the first quarter of 2021.
And speaking of 2021 – if you want to get the scoop on what may be in store for the NYC real estate market in the coming year, then I highly recommend checking out my post 2021 NYC Real Estate Market Predictions.